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Consumer sentiment in January plunged to its lowest level in a year, but one global business consulting firm sees a much bigger potential problem for the economy: deteriorating workforce psyche.

New York-based rogenSi reports employee morale declined last year to levels not seen since 2009 and 2010, during and immediately after the financial crisis.

Of the 4,000 business pros surveyed for rogenSi's 2012 Global Mindset Index, half said they felt "overwhelmed [and] undervalued" and were more motivated by "a fear of failure than a drive for success" in the workplace. More disturbing: 64% of respondents said their primary impetus for staying at their jobs was money.

Bummer! An index of the mind-set of business professionals shows morale fell to its lowest levels since the financial crisis.
William Waitzman for Barron's

"Money can't be the source of motivation when you're looking for performance," says Clark Perry, director and lead researcher of the GMI. "In boom cycles, leaders tend to have a healthy focus on what needs to be done to continue to drive profitable growth. But as soon as the bubble bursts, they turn to an unhealthy focus on results, which decreases employee commitment [and] discretionary effort, and negatively impacts productivity and overall market performance."

Over the past four years and in other surveys, Perry has seen a historical link between depressed employees and low gross-profit margins, noting the nexus between individuals' opinion of self-worth and leaders' effectiveness.

Bottom line: Businesses and markets are much better served if they can connect job security to a focus on personal achievement, rather than on only sales and profits.

-- Crystal Kim

Last Week: Review

Obama Sets His Agenda

After being sworn in to his second term on the Martin Luther King Jr. holiday, President Barack Obama gave a muscular defense of government's role in spreading economic benefits across all classes of Americans and safeguarding individual rights. Obama promised to preserve his health-care program, and he also addressed income inequality, women's issues, and gay marriage.

Delaying Debt Showdown

President Obama's impending tussle with Congress over the debt ceiling has been…wait for it…kicked down the road. Wednesday, the House of Representatives diffused the most pressing potential debt crisis facing the government by voting to suspend the debt limit until May 19. President Obama is expected to support the extension.

New Sheriff at the SEC

President Obama nominated Mary Jo White, a former U.S. attorney, to lead the Securities and Exchange Commission. If confirmed by the Senate, it would mark the first time a prosecutor has served as SEC chief; it could also signal tougher policing of Wall Street (see D.C. Current).

Jobless Claims Lifts Economy

Weekly jobless-benefits claims fell to a five-year low. The better-than-expected data, coupled with news that U.S. factory activity grew the most in nearly two years in January as well as robust earnings reports, helped push the Standard & Poor's 500 to its highest closing since late 2007, ending the week at 1502.96.

Clinton on the Grill

Secretary of State Hillary Clinton took responsibility for the attack on the U.S. consulate in Benghazi in her testimony before congressional committees. The exchanges between Clinton and some GOP committee members were sometimes heated but shed little light on specific causes and circumstances of the attack. A day after her testimony, Clinton presented her successor, John Kerry, to the Senate Foreign Relations Committee to begin his confirmation hearings. The former senator is expected to be confirmed to replace Clinton.

Fighting for Equality

The Pentagon ended a 1994 policy barring women from serving in combat. Supporters of the move argue the policy shift should more easily help women advance to leadership roles in the military. More than 150 female U.S. soldiers have died in Iraq and Afghanistan.

Farewell to Geithner

Timothy Geithner's last day as Treasury secretary was Friday; his potential successor, Jacob Lew, met with some members of Congress, ahead of his confirmation hearing.